Pamimai Drops Tobacco Distribution After Start Of Insolvency Procedings

01.07.2014 By Mirabela Tiron

Pamimai Distribution, a distribution company with revenue of 327 million lei (EUR74.3 million) in 2012, entered insolvency at its own request in 2013 after piling up debts of EUR7 million.

The largest lenders of Pamimai, which distributes cigarettes, prepay cards and toys, were BCR and Banca Transilvania.

“The firm holds no debt with the Finance Ministry,” said Ovidiu Neacsu, the representative of Sierra Quadrant, the legal administrator of Pamimai Distribution.

Mircea Oprescu, a stakeholder in the company and its chief executive officer, says there were several factors that led to insolvency.

“There is not just one reason, there are several reasons: the economic environment we operate in, the banks’ reactions.

The only good thing is that we believe in this business that now consists only of telecom activities, in which we’ve invested a lot,” Oprescu told ZF.

On November 6, 2013, the Bucharest Court of Law approved Pamimai’s request and launched general insolvency proceedings.

“It’s better to ask for insolvency than be executed by the others, you can save your business, protect yourself. We are supporting them legally. The bank is also backing us, it’s awaiting the reorganization plan,” said Neacsu.

He also maintained the firm is solid, is has “everything it needs for the loans it took out, it has assets” and that it had “bad luck”. Neacsu also specified the tobacco distribution activity led to the current situation and the company would most likely give up this activity after reorganization.

Pamimai Distribution lost the contract with British American Tobacco as the approval for a letter of bank guarantee came late. “We requested insolvency as we needed peace to reshuffle the business. We managed to generate operating income, we are confident we will succeed,” Oprescu also said.

(English version by Catalina Apostoiu)